Report on the Catalan & Spanish EPC Markets Deliverable 2.2

Transcription

1 Report on the Catalan & Spanish EPC Markets Deliverable. Horizon 00 Grant Agreement No This project has received funding from the European Union s Horizon 00 research and innovation programme under grant agreement No

2 Imprint Published by: Institut català d Energia Carrer Pamplona Barcelona Telephone: Internet: jm.granollers@gencat.cat Author(s): Francesc Vidal Juanjo Escobar team Josep Maria Granollers Image rights: Mentioning of image rights Disclaimer: The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EASMEnor the European Commission are responsible for any use that may be made of the information contained therein.

3 Table of Contents Introduction note Executive summary.... Framework conditions Relevant national legislation and regulation 6.. Relevant public support schemes 8.. Available financing options for Energy Services 8.. Development of energy prices in Spain 9.5. Critical assessment 10. Key actors Description of key actors 11.. Critical assessment 15. Market volume Number of EPC projects 16.. Size of EPC projects 17.. Other important energy services 17.. Critical assessment Market assessment of EPC sectors Public sector Private sector: Industry Private sector: Tertiary sector Private sector: Residential buildings 1 6. Results from stakeholder survey Basics of Survey 6.. Experiences with EPC Problems and potential solutions Highlights qualitative answers 1

4 Annex A: Price development in Spain... Introduction Note The market of energy services in Spain is highly concentrated in the Catalan region. Moreoverthe autonomous government of Catalonia is the only Spanish region that has set up strategies in order to introduce savings guarantee in the energy services process. On the other hand, the Spanish government through the National Energy Agency has not yet considered to have available a model of EPC contract for those customers with strong determination to assure energy savings. The Supply model is the only option for the Spanish government. For this reason this market report will mainly focus on the Catalan Region. The following graph (number of tenders in energy services per region) gives rational to this fact: This graph has been performed by ENERAGEN which is the Spanish association of energy agencies. It can be seen that Catalan tenders represents the % of total Spanish tenders. 1. Executive summary Political Framework Most important driver for EPC in Catalonia: Regional Energy Plan of the Catalan government for public buildings: Savings and Energy efficiency Plan for buildings and equipment of the autonomous government (Pla d Estalvi i eficiència energètic dels edificis i equipaments de la Generalitat) Most important barrier for EPC The Eurostat note published on August 015

5 Spanish market: No EPC business model considered under objectives of the Spanish Government. The Spanish energy agency (IDAE) has only developed supply model contract. Guaranteed performance contract is not still developed nor considered as one possible alternative solution to the former supply model. Most relevant support schemes: ICAEN has a facilitation team to identify projects that are feasible to be undertaken under the EPC process. This team was set up based on the Savings & Energy efficiency plan for public Catalan buildings. EPC market Public sector Most relevant opportunities: There is a big potentiality to renovate buildings and their facilities, as more than 60% of public buildings were built before 1980, when energy efficiency was a very secondary matter. Besides this, first regulation on isolation dates from 1987, from whatwe can conclude that the savings potentiality is bigger than expected. Most relevant barriers and threats: There is no a global political strategy (both in the Central Spanish or autonomous governments) to promote and spread to all market sectors a guaranteed savings model as EPC. This lack of knowledge prevents the growing of EPC. Public debt is another barrier to EPC, as currently there is no way to have off balance sheet for investment in public energy efficiency projects. Energy price is not high enough to force stakeholders to start EPC projects. Private sector: Industry Most relevant opportunities: High saving potential as industrial processes have not normally been designed under efficiency parameters, as happens with buildings sector. Most relevant barriers and threats: Lack of experts in industrial processes. 5

6 Industrial owners distrust of others affecting their industrial process. Effectiveness of industrial process is much more important than its efficiency. There are no or very few ESCo s specialized in industrial processes. Industrial EPC projects needs more time for its development as industrial processes have to be explained and understood by the ESCO. Private sector: Tertiary sector Most relevant opportunities: High potential in savings Lack of knowledge and awareness of owners and building facility managers about EPC process Most relevant barriers and threats: Split incentives dilemma. Private sector: Residential Buildings Most relevant opportunities: Savings and energy efficiency is a common interest of owners or tenants. High potential of savings Most relevant barriers and threats: No contract model developed for the specific case of residential buildings. This should be a really clear and simplified contract. Difficult to manage a set of tenants or owners of a residential building Split incentives dilemma.. Framework conditions.1. Relevant national legislation and regulation In Catalonia we have a Plan of Energy and Climate Change (PECAC, Pla de l Energia i Canvi Climàtic de Catalunya) which defines the strategynecessary to address the major challenge of the current energy system,in line with European policies and the world's most advanced technologies in order to achieve an 6

7 economyand a society of low energy intensity and low carbon emissions, innovative, competitive and sustainable in a medium and long term. The objectives of this Plan are to reach a share of renewable energy of 0,1% by 00, an improvement of energy efficiency of 0,% and a reduction of greenhouse gas emisions of 5, by 00. On the horizon of 00, based on a transitional national energy pact, Catalan targets are aligned with the objectives of the EU: achieve 7% of renewable and 50% of electrical energy will have renewable source. Efficiency will be improved by 7% and CO emissions will be reduced by 0% considering as a base year Scenario: Transform the current Catalan energy model into a 100% on renewable energy by 050, if possible technically, environmentally and economically and with social and territorial support that makes them viable. In line with European strategy of decarbinization by 050. Main legislations and regulations in Spain related to energy efficiency are transpositions from European Directive: Energy Performance Building Directive (EPBD) and Energy Efficiency Directive (EED). The Spanish regulation on the Technical Code for Buildings (FOM/165/01) defines conditions for new building to be very efficient in order to become nzeb buildings by 018 for public buildings and by 00 for any new private building. The current electrical self consumption regulation (RD900/015) has a very negative impact on renewable energies:instead of fostering clean energies it charges them, in the same way as if no renewable energies were installed. This is a key issue for the development of RES in the Spanish market, as this law is discouraging any attempt of becoming energy clean. Legislation / regulation European Directive 1/010. Energy efficiency in buildings. (Spanish transposition). Impact on Energy Services & EPC + European Directive 7/01 Energy Efficiency + RD5/01 Energy Certification of Buildings + RD56/016 Energy audits and definition of nzeb buildings + 7

8 Legislation / regulation RD 900/015. Electrical self consumption,electricity Sector Law (Llei sector elèctric 9/01) Impact on Energy Services & EPC - RD 1/006 Código técnico de la Edificación (Technical Code for Building) 0 Orden FOM/165/01. Basic Document DB-HE (Energy Saving) for the Technical Code 0.. Relevant public support schemes Some strategies and support schemes exist in the Catalan market and mainly in the city of Barcelona and its metropolitan area. The city of Barcelona has since March 016 a new support scheme to incentivize energy efficiency and renewable energies for the residential sector. Published in the Official Journal of Generalitat de Catalunya (DOGC), on 9/0/016 and carried out by the Barcelona Housing Consortium. Among other measures 50% of the total investments are granted for measures related to energy efficiency, renewable energies and improvements in isolation. Investments values are limited to euros per building. The Government of Catalonia agreed to adopt, on 5 February 01, the Catalan Strategy Renewal Energy Building, ECREE (Estratègia Catalana de Renovació Energètica d Edificis) which includes the fruits of previous work developed by Project MARIE (Mediterranean Building Rethinking for Energy Efficiency Improvement). Its objective is to incentivize Energy Renovation in 1, million Catalan buildings (Tertiary & Residential), to improve its energy behavior, foster economic savings and its confort and habitability conditions. ICAEN s program on EPC facilitation in Catalan public buildings is another practical support scheme in guiding those public departments in the process of EPC implementation. This strategy is under the framework of the savings plan and energy efficiency of government buildings. 8

9 .. Available financing options for energy services The majority of public EPC projects in Catalonia and Spain and for the Building Sector, performed until the end of 015, are projects financed by the ESCO, so investmentscomputed out off the balance for public entities. For public street lighting projects, carried out by Municipalities the most common modality is shared savings, but the ESCO is financing investments too... Development of energy prices in Spain Energy prices can be important drivers in taking the decision on carry out energy service projects and have big influence on their feasibility. Electricity and natural gas prices in Spain have been obtained from the Eurostat website page. The following graphics illustrate the evolution of these prices during the last 9 years: Price evolution for heating fuel oil in Spain during last 11 years is in the following graphic: 9

10 Electricity prices have been steadily increasing for Domestic sector in Spain since 007: 60% increase in 8 years. Electricity price for the industrial sector has been more stable and its increase has been of 0%. Natural gas prices have increased in both industry and domestic sectors in more than 5% since 007. Contrary to the electricity market, in the case of natural gas the price for industrial customers is approximately double to the domestic sector. Heating fuel oil price has had lots of fluctuations in the last 10 years. At the end of 015 the final price increase has been 0%, but within this period there have been increases of more than 60%. In Annex A can be checked graphs for the absolute prices in electricity, natural gas and oil..5. Critical assessment National legislation and regulation The transposition of the European legislation like EPBD and EED is having a positive impact on energy efficiency projects in Spain Unfortunately, the last Spanish legislation on the electricity consumption (year 015) penalizes the case of those consumers who want to install renewable or CHP. This has been called as the Sun tax. This kind of practices should be prohibited by the European Commission if there is a real interest in fostering RES energies and energy savings. 10

11 Public support schemes There aren t public support schemes for the EPC, in economic terms in Spain and Catalonia, no grants, no public funding at the moment. Financing Financing has mainly been done by ESCOs until now. This has been possible as the number of projects is still low, and the ESCOs awarded are the big ones. What will be critical is when lots of projects will be arisen and awarded to be funded, and at that time a solution should be found as Escos are not banks and cannot be indebted. One strategy has been tried to start without success and we believe is the critical thing that should be done: the development of a Finance protocol for the case of EPC projects. This protocol already exists (developed by EVO). A team or a workgroup should be established in order to solve the finance for Energy Eficiency Projects. Energy prices The drop of energy prices is clearly reducing the economic pressure on building owners and building energy managers to invest in energy efficiency to get a lower energy bill. Oil prices are kept low by oil companies in order to keep their share of market. As can be seen in Annex A, the heating oil increased at a maximum value by 01, and since this date has been dropping down Public debt levels Since the crises scenario on 01, Spanish and Catalan rules don t let any public entity to indebt. Only those Municipalities that can prove that have no debt could be allowed to be indebted. A solution has to be found for current situation, considering that an EPC project has a guarantee of investment if savings areguaranteed and high enough. 11

12 . Key actors.1. Description of key actors. ESCOs Many companies are operating or willing to operate as ESCO in the Spanish market. Since EPC was introduced in Spain, all major installation companies have been redefined as ESCos in order to have choice to be awarded in the EPC processes that have been undertaken. The biggest energy companies are now defined as ESCos. And the same happens for some Engineering companies, advisors, or even some manufacturers as those of Energy management software. The number of ESCOs might be around 100 in the whole Spanish market, but for the more public important projects the following companies would be the most significant 1. COMSA Emte. Soler energy services. Honeywell. Schneider 5. Cofely 6. Clece 7. Ferroser 8. Imtech 9. Ingesan 10. Rubatec 11. Valoriza 1. Veolia 1. Acciona 1. Arnó 15. DEXMA 16. Sece 17. Envolvalia 18. Elecnor 19. Applus energy 0. Gas Natural There are several associations that represent ESCOs in Spain and Catalonia: - CEEC, Clusterd EficiènciaEnergètica de Catalunya - ACTECIR, Associació Catalana de Tecnics de Clima i Refrigeració 1

13 - ANESE, Asociación Nacional de Empresas de Servicios Energéticos - AMI, Asociación de Mantenedores Integrales i Servicios energéticos - Ae, Asociación de empresas de eficiencia energética. EPC clients The following Customer groups in Catalonia can be considered for the energy services including the EPC: - Public buildings of the Autonomous Catalan Government - Public buildings of Municipalities and provincial councils - Tertiary buildings (commerce, trade, services, ) - Residential buildings - Industry. Number of Buildings for the Catalan Region: Public Buildings Number of buildings Energy consumption in GWh/y Energy costs in EUR million Total Potential (Catalonia) Catalan Government Buildings Municipal Buildings Provincial councils Tertiary buildings Residential Industrial buildings Public sector EPC is basically focused on the Catalan government buildings, as the strategy of promoting guaranteed savings contracts has been initiated by the owner of these buildings. 1

14 Municipal and provincial council buildings are more focused on supply contracting, as EPC needs knowledge they don t have, measure and verification to follow the savings and somebody (energy manager for example) to track obtained results and ensure that energy management is being done. It is just much easier for Municipalities to follow their standard process than the EPC process. Private sector (Industry, Commercial, Residential) The industrial sector is a major consumer of energy in Catalonia, being second sector final energy consumer after the transport sector. If values primary energy, industry (including entire energy sector) is very by far the largest consumer of energy in the country, representing 55% of total primary energy consumption in Catalonia. In addition, energy costs play a very important role in competitiveness at the industrial sector, as they may entail 0-0% of operating costs in certain basic industrial sectors, such as basic metallurgy, chemistry or cement. In certain energy-intensive sectors, the energy costs exceed the cost of raw materials or staff costs. Overall, the energy expenditure of the whole industrial sector in Catalonia is representing the order of 7% compared to the costs of processing and about 8% industrial NPV(Net present Value). Improving energy efficiency is therefore a key elementfor the competitiveness of industrial businesses. The highest industrial consumers of energy are 196 establishments, and represent almost 7% of total consumption of final energy for industry (011). The rest 8% of total final energy is consumed by.879 industrialplants. Increased cost of electricity for industry 10.% annual average (00-01). SMEs have electricity cost (main energy source) higher than for large companies and the whole EU and eurozone. Few EPC are being conducted in the industry sector. The difficulty is in the fact that no industry will let to know their industrial process for obvious reasons. That is a big difficulty in improving its efficiency by outsorcing an improvement proposal to any engineering or technical advisor. Residential buildings,represents the biggest market volume in terms of number of buildings in Catalonia and Spain. The singularities of tenants and owners make things difficult to establish EPC programs to implement saving measures. 1

15 In Catalonia big efforts are being done through the ECREE strategy to implement saving measures in a pilot residential building in which EPC process should be applied. EPC Facilitators Project facilitators (engineering companies, consultants, freelance engineers, ) are a key part in the development of EPC implementation, as the majority of customers need guidance and advice to implement saving measures with guaranteed results. There are still few EPC facilitators in Catalonia. That s why many times this role is being taken by ESCOs which offer it. Financial Institutions Financial Institutions are another key actor to be considered for the EPC market. If no funding solutions are available, energy efficiency projects are not implemented. Some Local Financial institutions identified in the Catalan market are the following: ECROWD, Crowdfunding solutions.very opened to invest in EPC projects. BANC de SABADELL.. Have some products for efficiency projects BBVA. Has a division exclusively dedicated to finance efficiency projects. SUMMA CAPITAL.Cooperating with some ESCos. ICF (Institut Català de Finances) Public Financial Institution owned by the government of Catalonia, which mission is to foster and improve access to funding for Catalan enterprises.. Critical assessment All EPC clients should have or receive clear information on what is EPC and what benefits they can get from this. A strategy should be created to reach and make all kind of customers aware of the benefits of EPC contracts. 15

16 Residential sector needs a very simplified contract model for an EPC contract, otherwise it will be very difficult to implement EPC projects in this sector Banks and Local Financial Institutionsare key players to allow a significant growth of Energy Performance contracts. EPC represent a new model for them, probably not understood. In our opinion what the Financial sector needs is training. EVO has developed an Energy Efficiency Finance protocol which should be explained to the banks willing to give support to energy efficiency projects under EPC schemes. Market volume The Spanish and Catalan EPC markets are emerging markets. First EPC projects started on 011. In Catalonia for the public sector, first projects starts at the end of 01. Some EPC projects were already developed in the Industrial sector, like the case of Ford motor factory of Valencia where Johnson Controls sign an EPC to optimize energy consumption in its manufacturing process. Other EPC projects have been undertaking mainly in American companies established in Spain. That s would be the case of Ameresco, an American Esco established in Madrid which performs EPC basically in US military bases in Spain. 95% of EPC market is represented by the 0 biggest ESCOs. Anyway small or SME escos perform small EPC in private sector. The following are the main ESCOs with the economic value of their EPC contracts: ESCO Turnover with EPC (01, 01 & 015) COMSA Service SOGESA Grup SOLER VEOLIA (ex-dalkia) Rubatec VALORIZA Sum

17 .1. Number of EPC projects Number of EPC projects with public clients in Catalonia (Spain) Number of EPC projects with private clients in Spain Data not available Even not reported, it is known that EPC projects on private sector have been done since 010 or before. For example for the sector of Industry, companies like Schneider, Jonhson Control, Honeywell, and others have been doings especific projects, and in Tertiary sector other SME Escos have performed EPC projects. The number of EPC projects increases with years, timidly but growing. In the period of last 1 months (June 015 to June 016) our ICAEN s facilitator team has been involved in 7 new projects from which some projects should be awarded during 016 for their implementation... Size of EPC projects The average key parameters for the public sector projects have been the following: Key parameters Average baseline / project 895,16 /a Average guaranteed savings % Average investment / project Average ESCO turnover over duration Average contract duration 6 years Key Parameters of EPC projects facilitated by ICAEN. 17

18 .. Other energy services The energy supply contracting (ESC) model is the predominant business model in the Spanish and Catalan markets. Less of 5% of the market is covered by EPC in Spain and in Catalonia is over 5%. Few companies focus mainly in providing only EPC. This would be the case of Honeywell, Schneider or Johnson Controls among other smaller companies. Other companies like Veolia (Dalkia), Cofely or energy companies (Gas Natural, Iberdrola or Endesa) are mainly focused on selling energy, but adapt to EPC schemeswhen procurement processes are defined under EPC... Critical assessment Customer attitude towards energy services is influenced in Spain and in Catalonia by the defined guidelines made by the Central or local government, or National energy agencies. For example all owners or energy managers of Governmental buildings from Generalitat will focus on the EPC, because this is the model defined for them in the Energy Plan. In the case of Municipalities, as they depend on the Central Spanish regulations, they will focus on supply model because the National Spanish Energy Agency doesn t consider the EPC option as an alternative option to the supply model.so there is no possibility of choosing between EPC and Supply. If both, National Energy Agency and Local government energy agencies would give more information and dissemination on the advantages of the EPC model, this market volume would grow considerably. This is a matter of political will. 18

19 5. Market assessment of EPC sectors Based on our own experience and information obtained from different sources the following SWOT analysis regarding EPC is shown for different building sectors Public sector STRENGTHS WEAKNESSES 1. Financing through ESCO.. Lack of money (crisis scenario). Added value to energy efficiency (savings allow improvement of facilities). Guaranteed energy costs savings OPPORTUNITIES 1. Most Buildings needs renovation.. Private capital can be attracted.. Large potential in lots of buildings. Exemplary role of public sector 5. Optimized and global management of energy consumption facilities. 1. Not so easy to obtain Finance.. Lack of trust from customers: uncertainty in guaranteed savings. Lack of expertise in M&V.. Long term contracts THREATS 1. Customers might think they can implement ECMs through their inhouse solution.. Giving value to short term savings versus long or medium term.. Strongly depending on political support. Eurostat guidance note. 19

20 5.. Private sector: Industry STRENGTHS 1. High consumption. More opened to find technical solution to save energy & money. WEAKNESSES 1. Industry is very careful about their industrial processes. Big industries have their own experts OPPORTUNITIES THREATS 1. Obligation of doing audit. 1. Auditors or Escos have no knowledge of industrial processes 5.. Private sector: Tertiary sector STRENGTHS 1. Guaranteed energy savings for the customer. Increase of building value.. Reduction of CO emissions WEAKNESSES 1. Business model unknown to the majority of customers.. Split incentives dilemma for rented facilities. OPPORTUNITIES 1. Green image. Reduction of energy costs for both tenants and owners THREATS 1. Risk of default by the customer. 0

21 5.. Private sector: Residential buildings STRENGTHS 1. Owners will pay less energy.. Increased building value WEAKNESSES 1. Split incentive dilemma. Complex contracts. Residential Customers are difficult to wok with. OPPORTUNITIES 1. Interest of tenants in energy cost savings.. Significant savings potential THREATS 1. Risk of default by the customer. 1

22 6. Results from stakeholder survey From July until August 016 an online stakeholder survey was conducted in order to address EPC-market stakeholders. The questionnaire included a mixture out of quantitative as well as qualitative questions concerning the usage of energy efficiency services in Catalonia (Spain). 6.1 Basis of survey More than the 7% of survey participants (1) were ESCo companies, and a 5% of them (+) are involved in facilitation on energy services. There are a significant number of respondents which sector is not clearly defined: 7 of a total participants, (around %). The participants of the survey were mostly energy service providers Question: Please indicate, to which sector your organisation is assigned to/what your personal assignment is predominantly. Base: answers 1 building administration facility management building owner energy service company (ESCO) project facilitation for energy services energy agency other (please indicate)

23 Respondents operate mainly in the public sector Question: Please indicate the predominant field of operation of your organization, respectively yourself: (multiple choice possible). Base: 8 answers, 1 indications residential buildings public buildings industry tertiary sector (commerce, trade, services) 6. Experiences with EPC In spite of having a small sample, only 6 answers, practically 100% agree that reduction of energy costs has high priority in their organization. Reduction of energy costs is a high priority Question: Please indicate whether you agree with the following statements: The reduction of energy costs is a high-priority target in our organization. Base: 6 answers Strongly agree rather agree rather disagree disagree No opinion Lack of responses might be due to the fact that as this is a so evident target, most of them think is not necessary to respond.

24 Experience with the involvement of ESCOs seems to be quite available, but sample size is small. Question: Please indicate whether you agree with the following statements: We have experience with the involvement of energy service companies (ESCOs). Base: 6 answers no opinion disagree 1 rather disagree 0 rather agree strongly agree Despite few answers, no negative experience seems to be with EPC. It seems to be a good and positive experience Contracting an ESCo ( but few responses!) Question: Please indicate whether you agree with the following statements: Our experience with ESCOs was predominantly positive. Base: 6 answers no opinion disagree0 rather disagree0 rather agree strongly agree

25 8 % of respondents have experience with EPC in the public sector Question: For which kinds of buildings has your organisation already implemented or accompanied EPC-projects? (multiple choice possible) Base: 16 answers, 50 indications public administrative building schools and kindergartens universities retail buildings private office buildings industrial buildings hospitals residential buildings 0 other The following two graphs give evidence that exist a strong tendency in some segment market of the Catalan and Spanish markets to implement improvements by them own, and the same for its maintenance and operation. 5

26 5 Implementation of measures are mainly externally accomplished (in 60%) Question: With whom do you normally implement the diverse phases of an energetic modernization? (multiple choice possible). Design. Base: answers 0 own staff external designer specialist firm/manufacturer energy service provider 0 Operation of facilities after implementation of measures is accomplished predominantly internally Question: With whom do you normally implement the diverse phases of an energetic modernization? (multiple choice possible). Operation of facilities after implementation of measures. Base: answers own staff external facility management energy service provider 0 6

27 Increase the building value is not a driving force to implement modernization measures Main drivers for energy efficiency measures are financial savings due to the reduced energy usage and the reduction of maintenance costs. Note that CO reduction is equally evaluated to the renewal of outdated equipment, meaning that the Spanish market conceives both facts are very related, and it s relatively important: only when an equipment is phased out makes sense reduce CO. Financial savings, reduction of maintenance costs and increase of confort of users are the most important reasons for modernization Question: There are several reasons for an energy efficient refurbishment. How do you evaluate the importance of the following aspects: Base: 7 answers CO reduction increase in value of building thanks to improved ecological footprint ( Green Value ) increase in value of building thanks to upgraded equipment increase of comfort for users very important rather important reduction of maintenance costs rather unimportant outsourcing of facility operation renewal of outdated HVAC or electricity appliances financial savings due to reduced energy usage unimportant no estimation

28 For the follow up steps toward an EPC project, the following reasons have been evaluated as expected: Most important reasons for EPC: 1. Guaranteed energy cost savings. Technical competence of ESCOs. Economic reliability /consistence of ESCOs Question: Please evaluate the subsequent aspects regarding their influence for the implementation of EPC projects:note: If you cannot evaluate a certain aspect, indicate cannot be assessed. Economic aspects. Base: fiscal advantage 9 8 very beneficial reduction of maintenance effort outsourcing of economic business risk to ESCO outsourcing of technical risk to ESCO neutral rather hindering technical competence of ESCOs 1 10 very hindering economic reliability/consistence of ESCOs increase in value of building cannot be assessed guaranteed savings by ESCO

29 Private and Public sectors have different requirements in terms of contract duration, but it seems to be not so opposite as it used to be. Currently there is a tendency as public sector seems seeking to shorten the contract duration as well. Similar requirements: Short contract duration in the private sector, as well as in the public sector Question: Please evaluate the subsequent aspects for the implementation of EPC projects:note: If you cannot evaluate certain an aspect, indicate cannot be assessed. Contractual aspects. Base: answers rather short contract duration (e.g. 5 years) in public sector projects rather long contract duration (e.g. 15 years) in public sector projects very beneficial rather beneficial neutral rather short contract duration (e.g. 5 years in private sector projects rather long contract duration (e.g. 15 years) in private sector projects rather hindering very hindering cannot be assessed

30 User acceptance is an essential aspect for the implementation of EPC projects Question: Please evaluate the subsequent aspects for the implementation of EPC projects:note: If you cannot evaluate certain an aspect, indicate cannot be assessed. Other aspects. Base: 1 answers budgetary distinction: financial relief of investment budget with parallel financial charge of operational cost budget (EPC rates) ecological balance/reduction of CO user acceptance of EPC very beneficial rather beneficial neutral rather hindering very hindering cannot be assessed Problems and potential solutions The development of EPC projects is facing specific challenges depending on the customer group. Those problems were presented and potential solutions offered, which were assessed by the respondents. Problem 1: Financial investment in energy efficiency measures for public institutions: The department/budget, which finances the measures does not benefit from the measures. Solution Top: establishment of a global budget for the departments with fixed energy costs. The achieved savings refinance the investment. Solution Flop: in the case of large-scale real estate the renewal of tenancy contracts (which are necessary, as operational costs change after implementing energy efficiency measures) can be avoided by the development of legally effective additional agreements 0

31 Problem investor vs. beneficiary: monetary benefits are very important to be considered Question: The development of EPC projects is facing specific challenges depending on the customer group, which are described subsequently. At the same time, potential solutions are presented.please indicate your evaluation of the following proposed solutions. Problem 1:Financial investment in energy efficiency measures for public institutions:the department/budget, which finances the measures does not benefit from the Solution : consideration of non-monetary benefits: increase of value and comfort, reduction of maintenance requirements (opportunity costs). 1 excellent idea fair idea Solution : in the case of large-scale real estate the renewal of tenancy contracts (which are necessary, as operational costs change after implementing energy efficiency measures) can be avoided by the development of legally effective additio I have my doubts not expedient Solution 1: establishment of a global budget for the departments with fixed energy costs. The achieved savings refinance the investment cannot be assessed Problem : Tenancy in commercial properties: The landlord invests in energy efficiency measures but cannot refinance those by reduced energy cost, as only the tenant benefits from energy cost savings. Solution Top: tenant pays fixed rent (including operational, heating and electricity costs). The landlord can refinance the investment through the savings. Solution Flop (not so far from the other solution) : tenants receive guaranteed/increased comfort for guaranteed cost. At the same time they accept higher payments to the landlord in extent of the energy savings. 1

32 Problem financing efficiency measures in rented commercial properties: fixed rent (including operational, heating and electricity costs) for financing Question: Please indicate your evaluation of the following proposed solutions. Problem :Tenancy in commercial properties: The landlord invests in energy efficiency measures but cannot refinance those by reduced energy cost, as only the tenant benefits from energy cost savings. Base: answers Solution : tenants receive guaranteed/increased comfort for guaranteed cost. At the same time they accept higher payments to the landlord in extent of the energy savings. 7 5 excellent idea fair idea Solution 1: tenant pays fixed rent (including operational, heating and electricity costs). The landlord can refinance the investment through the savings. 5 8 I have my doubts not expedient cannot be assessed Problem : The behaviour of users in buildings influences the energy demand drastically. However, the change of behaviour of the user can turn out to be difficult. Solutions Top: Technical solution: motion sensors, window-contact switches etc. for achieving savings without the necessity to influence behaviour of users. Part of the achieved savings is paid/accredited to the user as profit sharing.

33 Problem efficiency measures and behaviour of users in rented properties: "profit sharing" of user/tenants Question: Please indicate your evaluation of the following proposed solutions. Problem :The behaviour of users in buildings influences the energy demand drastically. However, the change of behaviour of the user can turn out to be difficult. Base: answers Solution : part of the achieved savings is paid/accredited to the user as profit sharing excellent idea I have my doubts Solution 1: technical solution: motion sensors, window-contact switches etc. for achieving savings without the necessity to influence behaviour of users 16 0 not expedient cannot be assessed Highlights qualitative answers It is evident that one reason why EPC-projects are often not developed lies in the fear of public bodies, that an ESCO could get high profit out of it, but as well many times clients don t trust enough on ESCOs for guarantying energy costs savings. It has also been stated critically that Little trust of public sector in efficiency and long contracts. Difficult to make significant investments in contracts lower of 10 years (chillers, ) Little previous experience. Missing aid to promote and stimulates EPC contracts Real lack of expertise of all companies, even they say they have

34 price index (%) Annex A: Development of energy prices in Spain Price for electricity (industry) /kwh 0,091 0, ,108 0,1075 0,1091 0,1165 0,115 0,1175 0,1097 Price index electricity (industry) ,9 118,6 117,9 119,6 15,7 16,5 15,8 10, Price for electricity (Domestic) /kwh 0,115 0,1005 0,175 0,155 0,1605 0, , , ,1895 Price index electricity (Residential) , 116,1 16, 1, 15, 15,6 15,6 159,7 Price for Natural Gas (industry) /kwh 0,055 0,0 0,09 0,08 0,0115 0,068 0,077 0,0685 0,085 Price index, natural Gas (industry) 100,0 117,6 11,5 111, 1, 1, 17,8 1,5 1,7 Price Natural Gas (Domestic) /kwh 0,0501 0,0595 0,095 0,059 0,056 0,061 0,068 0,0685 0,0665 Price index, natural gas (Residential) 100,0 105,7 98,7 91,6 91,0 17,9 19, 16, 1, 0, 0,18 0,16 0,1 0,1 0,1 0,08 0,06 0,0 0, Prices for electricity ( /kwh), Spain Industry Domestic Price index for Electricity in Spain, base year Industry Domestic

35 5

36 Price for gasoil C /kwh 0, ,6189 0,60 0,868 0,55 0, , ,9507 0,9119 0,861 0,66951 Price index Gasoil-C

37 7